Tài liệu Balancing fair and equitable treatment standard and environmental protection in international investment law

HO CHI MINH CITY UNIVERSITY OF LAW FACULTY OF INTERNATIONAL LAW -----------***----------- NGUYỄN HOÀNG NHI STUDENT ID: 1853801011291 BALANCING FAIR AND EQUITABLE TREATMENT STANDARD AND ENVIRONMENTAL PROTECTION IN INTERNATIONAL INVESTMENT LAW BACHELOR THESIS School year: 2018 - 2022 Supervisor: LL.M Nguyen Thi Lan Huong Ho Chi Minh City – Year 2022 HO CHI MINH CITY UNIVERSITY OF LAW FACULTY OF INTERNATIONAL LAW -----------***----------- NGUYỄN HOÀNG NHI STUDENT ID: 1853801011291 BALANCING FAIR AND EQUITABLE TREATMENT STANDARD AND ENVIRONMENTAL PROTECTION IN INTERNATIONAL INVESTMENT LAW BACHELOR THESIS School year: 2018 - 2022 Supervisor: LL.M Nguyen Thi Lan Huong Ho Chi Minh City – Year 2022 DECLARATION I declare that this thesis is the result of my research, which is implemented under the supervision of LL.M Nguyen Thi Lan Huong, ensures honesty, and complies with rules and regarding quotation, the note of references. Therefore, I hereby take full responsibility for this declaration. LIST OF ABBREVIATIONS ASEAN Association of Southeast Asian Nations BIT Bilateral Investment Treaty CIL Customary International Law CPTPP Comprehensive and Progressive Agreement for Trans-Pacific Partnership (2018) EVIPA European Union-Vietnam Investment Protection Agreement 2019 FDI Foreign Direct Investment FET Fair and Equitable Treatment FTA Free Trade Agreement FTC Notes Notes of Interpretation of Certain Chapter 11 Provisions of North American Free Trade Agreement, issued by the Free Trade Commission on 31 July 2001 GATT General Agreement on Tariffs and Trade (1994) ICSID International Center for Settlement of Investment Disputes IIA International Investment Agreement IIL International Investment Law MST Minimum Standard of Treatment NAFTA North American Free Trade Agreement (1993) OECD Organization for Economic Cooperation and Development RCEP Regional Comprehensive Economic Partnership (2020) VCLT Vienna Convention on the Law of Treaties (1969) WTO World Trade Organization TABLE OF CONTENTS INTRODUCTION ......................................................................................................... 1 CHAPTER 1. OVERVIEW ON FAIR AND EQUITABLE TREATMENT STANDARD AND ENVIRONMENTAL PROTECTION IN INTERNATIONAL INVESTMENT LAW .................................................................................................. 10 1.1 Theoretical issues with regard to fair and equitable treatment standard .... 10 1.1.1 Historical origin and meaning of fair and equitable treatment standard ....... 10 1.1.2 Formulations and interpretation of fair and equitable treatment standard in international investment treaties ............................................................................. 14 1.2 Environmental protection right of states ......................................................... 19 1.2.1 Legal basis of environmental protection right of states - right to regulate in the public interest ................................................................................................... 19 1.2.2 Regulations on environmental protection in international investment treaties..................................................................................................................... 24 1.3. Conflicts between the obligation to accord fair and equitable treatment standard under international investment agreements and the exercise of the environmental protection right of the host state ................................................... 33 CONCLUSION OF CHAPTER 1 .............................................................................. 36 CHAPTER 2. FAIR AND EQUITABLE TREATMENT STANDARD AND ENVIRONMENTAL PROTECTION IN INTERNATIONAL INVESTMENT ARBITRATION AND RECOMMENDATIONS FOR VIETNAM ....................... 37 2.1. Fair and equitable treatment standard standard and environmental protection in international investment arbitration ............................................... 37 2.1.1 Different approaches taken by arbitral tribunals in environment-related cases ........................................................................................................................ 37 2.1.2 Towards a balanced approach between fair and equitable treatment standard and environmental protection's right of the host state ............................................ 55 2.2 Recommendations for Vietnam ........................................................................ 66 2.2.1 Recommendations regarding investment treaty drafting ............................... 71 2.2.2 Recommendations regarding environmental policies and measures ............. 73 CONCLUSION OF CHAPTER 2 .............................................................................. 76 THESIS CONCLUSION ............................................................................................. 77 INTRODUCTION 1. Problem statement In this day and age, the enhancement of environmental protection standards, the progress made in the governance of sustainable development, together with the occurrence of many environmental incidents relating to investment activities have motivated governments to review, amend and update their domestic legal policies so as to keep them in line with social development requirements. In such a context, states can be placed in a dilemma since at the same time, they have to comply with obligations to protect foreign investment regulated in international investment agreements (“IIAs”). Arbitral practice indicates that there are many disputes between the host states and foreign investors arising out of the country’s failure to maintain a favorable legal framework for investment when pursuing their non-commercial objectives.1 The harmony between the state’s objective to attract foreign direct investment (“FDI”) by affording investment protection and the protection of the environment has long been a matter of considerable concerns in international investment law (“IIL”), mainly in IIAs and in the process of resolving investor-state disputes. To tackle this matter, states begin to review the content of their IIAs in an attempt to ensure both commitments regarding investment protection and sufficient policy space to exercise their sovereign rights concerning environmental issues. Typical of such an attitude is the amendment of IIAs’ preamble, the incorporation of general and specific exceptions as well as new methods of regulation on standards of investment protection such as most favored nation standard, fair and equitable treatment (“FET”) standard and expropriation clauses.2 Among them, the FET standard is controversial among scholars and has 1 Saverio Di Benedetto, International Investment Law and The Environment, Elgar International Investment Law, 2013, p. 4. 2 Nguyen Thi Lan Huong, “Liên hệ tiêu chuẩn “đối xử công bằng và thỏa đáng” với mục tiêu bảo vệ môi trường trong CPTPP – Một số đề xuất cho Việt Nam” (The relationship between “Fair and Equitable” and environmental purpose in CPTPP – Recommendations for Vietnam), Vietnamese Journal of Legal Science, 2019, Volume 06, p. 82-94. 1 become the most common standard for the resolution of investment disputes in recent years, particularly those involving tensions between an investor’s rights and the state’s regulatory measures.3 This stems from the vague, general and inconsistent regulation of FET provisions in IIAs as well as the broad interpretation of such a standard.4 Following this is the possibilities of different interpretation of the FET standard in arbitral jurisprudence, thus restricting the predictability of the outcome of investor-state disputes. A more serious consequence is that states may refrain from adopting legitimate environmental regulations for fear of being challenged (or threatened to challenge) by foreign investors before arbitral tribunals when investors feel that it is difficult to carry on their business in the host state or that value of their investments has diminished as a result of certain environmental regulations.5 With this situation in mind, the balance between the FET accorded to foreign investors regulated in IIAs and the regulatory power of states to pursue their environmental objectives is an urgent concern. Thus, this thesis with the topic “Balancing fair and equitable treatment standard and environmental protection in international investment law” aims to analyze the FET standard, the environmental protection rights of states and their relevance in arbitral jurisprudence, thereby providing recommendations for Vietnam. 2. Literature review Many studies on the FET standard and its relations with the environment have been recorded internationally, mostly as part of the comprehensive research on IIL and sustainable development. In Vietnam, however, FET standard and environmental protection have not been profoundly researched. Existing literature relevant to this issue 3 Suzanne A. Spears, “The quest for policy space in a new generation of international investment agreements”, Journal of International Economic Law, 2010, Vol. 13 No. 4, p. 1052. 4 Ying Zhu, “Fair and Equitable Treatment of Foreign Investors in an Era of Sustainable Development”, Natural Resources Journal, 2018, Volume 58, p. 325. 5 Satwik Shekhar, ‘Regulatory chill’: Taking right to regulate for a spin, Centre for WTO Studies, 2016, p. 5-6. 2 is limited, and where it is available, it pays attention to newly-concluded treaties entered into by Vietnam such as the Comprehensive and Progressive Agreement for TransPacific Partnership 2018 (“CPTPP”). 2.1 Materials in Vietnamese ● Books/ Textbooks Trinh Hai Yen, Textbook on International Investment Law, The Truth National Political Publishing House, Ha Noi, 2017: The textbook provides general knowledge of international investment law. The author analyzes the FET standard and its application in practice in chapter V of the textbook. The analysis on environmental protection is merely generally provided in section II Chapter VII of the textbook and its interaction with the FET standard has yet to be mentioned. ● Scientific articles/ scientific research Tran Thang Long, “Áp dụng quy định trường hợp ngoại lệ về môi trường trong pháp luật đầu tư quốc tế và một số so sánh với thực tiễn Việt Nam” (Application of Provision on Environmental Exception in International Investment Law and Comparisons with Vietnamese Practices), Legislative Studies Journal, 2019, No 4/2019: The article analyzes environmental exception provisions in IIAs and how they are applied in investment cases. Thereby, the author compares them with the situation of Vietnam and offers some recommendations for Vietnam. Although the article provides details about environmental protection, the focus of the study is on expropriation instead of the FET standard. Nguyen Thi Lan Huong, “Liên hệ tiêu chuẩn “đối xử công bằng và thỏa đáng” với mục tiêu bảo vệ môi trường trong CPTPP – Một số đề xuất cho Việt Nam” (The relationship between “Fair and Equitable” and environmental purpose in CPTPP – Recommendations for Vietnam), Vietnamese Journal of Legal Science, 2019, Volume 06: The author analyzes how the FET standard is variably regulated under international investment treaties and the way it affects the FET interpretation in investment arbitral 3 tribunal in practice. Thereby, the author gives an insight into the relationship between FET standard and environmental protection objectives in CPTPP and offers some recommendations for Vietnam so as to effectively implement environmental protection policies without violating the FET standard in IIAs where Vietnam is a member. However, since the scope of the article is limited to provisions under CPTPP, the author exclusively focuses on the FET standard that is linked to the customary international law (“CIL”), which cannot provide a general picture of the link between the FET standard and environmental objectives. Nguyen Xuan My Hien, “Sự phát triển của tiêu chuẩn đối xử công bằng và thỏa đáng trong hiệp định thương mại tự do thế hệ mới” (The development of the FET standard in new generation free trade agreements), Vietnamese Journal of Legal Science, 2019, Volume 06: The article analyzes the definition, characteristics, purpose of the FET standard and compares how the FET standard is regulated in traditional IIAs and new generation IIAs, in order to see the attempt of states to address the conflict between the requirement of foreign investor protection and the host state’s sustainable development objective. Yet, since the article does not specifically address the environmental objective of the host state and the focus is on the provisions of the FET standard under the CPTPP, further research on the FET and environmental protection is in need. ● Theses Ngo Nguyen Thao Vy, “Quy định về quyền bảo vệ môi trường của nhà nước tiếp nhận đầu tư trong khuôn khổ các hiệp định đầu tư quốc tế - Kiến nghị cho Việt Nam” (Regulations on environmental protection rights of the host state in international investment treaties - Recommendations for Vietnam), Master thesis, Ho Chi Minh City University of Law, 2018: The thesis analyzes states’ right to protect public interest in general and states’ right to protect the environment in particular through provisions under IIAs and practical case study. The thesis also demonstrates recent trends in interpreting the right to protect the public interest of the host state. Thereby, some recommendations 4 for Vietnam are given. However, the thesis does not provide in-depth research on environmental protection right in relation to the FET standard. Nguyen Ngoc Mai Thy, “Vấn đề bảo vệ lợi ích công cộng khi giải quyết tranh chấp giữa quốc gia và nhà đầu tư nước ngoài trong hiệp định đầu tư quốc tế - Kinh nghiệm cho Việt Nam” (The protection of public interest when resolving disputes between the host states and foreign investors - Recommendations for Vietnam), Master thesis, Ho Chi Minh City University of Law, 2017: In this thesis, a general overview of public interest in international investment law and in international investment arbitration, as well as an assessment of the approach in dealing with public interest matters of the arbitral tribunals through their decisions are provided. Thereby, the author analyzes the approach of Vietnam with regard to public interest protection and offers some recommendations. However, environmental protection, as an aspect of public interest protection, and its link to the FET standard have not yet been deeply researched. 2.2 Materials in foreign language ● Books/ Curricula Saverio Di Benedetto, International Investment Law and The Environment, Elgar International Investment Law, 2013: The book clarifies the conflicting relationship between international investment rules and environmental protection. It further provides a critical analysis of case-law arguments and treaty solutions that address the integration of environmental concerns into IIL. Thereby, the book outlines possible scenarios for the evolution of the integrative question. More research is needed to elaborate on, in particular, the FET standard and its interaction with environmental protection. ● Scientific articles/ scientific research Ying Zhu, Fair and Equitable Treatment of Foreign Investors in an Era of Sustainable Development, Natural Resources Journal, 2018, Volume 58: The article analyzes models adopted by tribunals in crafting the general threshold of the FET standard in environment-related investment cases and examines the tribunals’ diverse 5 approaches to assessing the FET in such cases. Thereby, the article offers recommendations towards an integrated methodology for assessing environmental regulations under the FET. Since the article focuses on the analysis in arbitral practice, the theoretical issues have yet to be thoroughly discussed. Federico Ortino, The Obligation of Regulatory Stability in the Fair and Equitable Treatment Standard: How Far Have We Come?, Journal of International Economic Law, 2018, 21, p. 845-865: The article elaborates on the conceptual distinction between 'strict' and 'soft' stability obligations of the host states. Through the analysis of the way investment treaty tribunals have applied the FET provision in cases of host states' regulatory change, the author’s main argument is that several recent arbitral tribunals still fail to clearly set out the role of regulatory stability within the FET standard. The article focuses on regulatory stability as one element of the FET standard and therefore, the FET standard in general has not been comprehensively researched. Camille Martini, Balancing Investors' Rights with Environmental Protection in International Investment Arbitration: An Assessment of Recent Trends in Investment Treaty Drafting, International Lawyer, 2017, Volume 50, No 3, p. 529 - 583: The article assesses the differences in the way recent arbitral tribunals have interpreted IIAs' provisions to solve the conflict between investors' rights and states' ability to regulate on environmental matters. Then, the environmental protection provisions that states have incorporated in newly drafted IIAs are analyzed, which demonsrates the states’ attempt to incorporate public concerns directly into the text of their investment agreements. However, the study has not yet been deeply researched on the FET standard as a whole but rather focuses on legitimate expectations amongst the several components of the FET standard. Tarcisio Gazzini, Bilateral Investment Treaties and Sustainable Development, The Journal of World Investment & Trade, 2014, No 15, p. 929 - 963: In this article, the author explores the relationship between foreign investment and sustainable 6 development. Through examining recent treaty practice, the author assesses how States can take full advantage of investment treaties as vehicles for economic development without compromising on the protection of the environment. Thus, the article provides a general picture instead of in-depth research on the FET standard and its relation to environmental protection. ● Theses Le Thi Ngoc Ha, Vietnam’s International Investment Agreements: Various Substantive Compatibility Thresholds For Legislative Measures, La Trobe University, Australia, 2021: The author provides an extensive research of the context of investment protection provisions governing substantive aspects of legislative measures in Vietnam’s IIAs. Thereby, the author clarifies substantive requirements and/or qualifications for legislative measures and substantive qualifications for exceptional legislative measures possibly imposed by provisions in Vietnam’s IIAs (including those for FET standard and those for public interests). As the author limits her research objectives to Vietnam’s IIAs, further research on international investment treaties and their links to Vietnamese context is necessary. Dávid Rédli, Limitations to States’ Regulatory Power in International Investment Arbitration Resulting from Standards of Protection, with a Focus on Fair and Equitable Treatment Standard, Masasryk University, 2016: The thesis provides analysis on sovereignty of states, the FET standard, as well as how to balance private and public interest in IIL by using the proportionality test. The thesis also demonstrates the confining approach and benevolent approach of arbitral tribunal towards states’ right to regulate. However, the matter of environmental protection has yet to be fully discussed in this thesis. 3. Purpose of the study This thesis aims to analyze the relationship between the FET standard and environmental protection in IIL by assessing IIAs’ languages and the evaluation of 7 international investment arbitration, thereby providing recommendations for improving and balancing the investor protection obligation and the environmental protection right of states, especially in the context of Vietnam. To accomplish the above purpose, this thesis performs the following tasks: First, analyze such theoretical issues of the FET standard as its origin, its meaning, and how it is regulated and interpreted under IIAs. Additionally, analyze the basis for the environmental protection right of states and how it is regulated under IIAs. Second, analyze two selected cases to clarify different approaches adopted by arbitral tribunals in environmental-related cases. Third, offer problem-solving recommendations for a better balance between the FET standard and environmental protection and link to the current situation in Vietnam. 4. Objectives and scope of the study 4.1 Objectives of the study The regulations and provisions relating to the FET standard and environmental protection in international investment treaties and in investment treaties of which Vietnam is a member, especially those recently concluded including the CPTPP, the Regional Comprehensive Economic Partnership 2020 (“RCEP”) and the European Union-Vietnam Investment Protection Agreement 2019 (“EVIPA”). Tribunal approaches towards FET in environmental-related cases resolved by international investment tribunals. 4.2 Scope of the study As to the content, this thesis studies mainly on the basic theoretical issues and practical matters arising from the relationship between the FET standard and environmental protection. As to the space, this thesis analyzes decisions of arbitral tribunals in international investment disputes relating to the FET and environmental protection. Additionally, 8 relevant IIAs’ provisions are under discussion to clarify how states govern this matter in reality. As to the time, this thesis focuses on recent discussions and case studies from 2010 onward. 5. Research methodologies Throughout the thesis, the author will utilize three main research methods: analytical, comparative, and synthetic. These research methods are determined not to be set to isolation but in interweavement. The analytical method is conducted in both chapters. In chapter 1, this method is used to analyze the basis theoretical issues with regard to both FET standard and environmental protection in IIL. In chapter 2 this method is applied in order to point out the problems of the divergent ways taken by arbitral tribunals in cases related to environmental issues. The comparative method is implemented in Chapter 2 for comparing the two different approaches taken by arbitral tribunals to resolve disputes arising from the conflict between investor protection and environmental protection. The synthetic method is used to synthesize analyses and comparisons, thereby providing a general picture of the situation and offering recommendations. 6. Thesis structure This thesis is structured in two chapters as follows: Chapter 1. Overview on FET standard and environmental protection in international investment law Chapter 2. FET standard and environmental protection in international investment arbitration and recommendations for Vietnam 9 CHAPTER 1. OVERVIEW ON FAIR AND EQUITABLE TREATMENT STANDARD AND ENVIRONMENTAL PROTECTION IN INTERNATIONAL INVESTMENT LAW This Chapter will introduce the FET standard with regard to its historical origin, meaning, as well as how the standard is formulated under international investment treaties and variously interpreted. This Chapter will also analyze the environmental protection right of states in respect of the legal basis for states to exercise their right to protect the environment and how matters of the environment is regulated under IIAs. Accordingly, conflicts between the obligation to follow the FET standard under IIAs and the exercise of the environmental protection right of the host state will subsequently be demonstrated. 1.1 Theoretical issues with regard to fair and equitable treatment standard 1.1.1 Historical origin and meaning of fair and equitable treatment standard The obligation to provide “fair and equitable treatment” is often stated, together with other standards, as part of the protection due to foreign direct investment by host countries. It is an “absolute”, “non-contingent” standard of treatment whose exact meaning has to be determined, by reference to specific circumstances of each case, as opposed to the “relative” standards embodied in “national treatment” and “most favored nation” principles, which have recourse to the treatment accorded to other investment to define the required treatment.6 As to its historical origin, the concept of FET is not new but has appeared in international documents for some time. An early version of the FET standard appeared in Article 11(2) of the Havana Charter for the establishment of an International Trade 6 OECD, “Fair and Equitable Treatment Standard in International Investment Law”, OECD Working Papers on International Investment, 2004, 2004/03, p. 2 10 Organization in 1948, assuring “just and equitable treatment for the enterprise, skills, capital, arts and technology brought from one Member country to another.”7 Although the Havana Charter failed to enter into force, this early model of the FET standard was subsequently incorporated into certain United States Friendship, Commerce and Navigation Treaties (FCN Treaties), with a reference either to “equitable” treatment or to “fair and equitable” treatment.8 The first use of the FET clause in the IIA context can be traced back to Article I of the Draft Convention on Investments Abroad proposed by Hermann Abs and Lord Shawcross in 1959: “Each Party shall at all times ensure fair and equitable treatment to the property of the nationals of the other Parties…”. Following this, the 1967 Organization for Economic Cooperation and Development (“OECD”) Draft Convention on the Protection of Foreign Property also included a FET clause along similar lines.9 It is important to note here that the Draft OECD Convention was used by most OECD countries as the basis for their IIA negotiations. By referring to the OECD model and using it systematically, they are also referring to this standard as defined by the Draft Convention of 1967. Nowadays, almost all modern bilateral investment treaties (“BITs”) and multilateral IIAs include FET clauses.10 Even some Asian and Latin American countries that traditionally favored the use of national treatment rather than the FET standard for a better control of foreign investments, have incorporated FET clauses into their BITs.11 As to its meaning, although most investment protection agreements require that investments and investors covered receive “fair and equitable” treatment, there is no 7 Havana Charter for an International Trade Organization, U.N. Doc. E/Conf. 2178, art. 11(2)(a)(i) (Mar. 24, 1948). For example, Article I(1) of the 1954 United States-Germany FCN Treaty reads: “Each Party shall at all times accord fair and equitable treatment to the nationals and companies of the other Party and to their property, enterprises and other interests.” 9 Article 1(a) of the 1967 OECD Draft Convention on the Protection of Foreign Property provides: “Each Party shall at all times ensure fair and equitable treatment to the property of the nationals of the other Parties.” 10 August Reinisch and Christoph Schreuer, International Protection of Investments: The Substantive Standards, Cambridge University Press, 2020, p. 259. 11 Ying Zhu, supra note 4, p. 323. 8 11 general agreement on the precise meaning of this standard. According to the Concise Oxford Dictionary, the word “fair” is defined as “just, unbiased, equitable, in accordance with rules”.12 Meanwhile, “Equity” is a word related to the idea of equilibrium defined as “a state of physical balance”.13 A noticeable question that has been raised is whether the FET standard actually contains two independent standards, namely “fair” and “equitable”. In practice, it is generally assumed that “fair and equitable” must be considered to represent “a single, unified standard”.14 What is more, in many agreements – especially in Spanish and French language treaties – the phrase appears as “just and equitable treatment” instead of “fair and equitable treatment”.15 A few BITs also refer to ‘equitable and reasonable’ treatment.16 However, these variations have been generally viewed as insignificant and can be used interchangeably with the term “fair and equitable”.17 Based on a plain meaning of the words, “fair and equitable” treatment requires “an attitude to governance based on an unbiased set of rules that should be applied with a view to doing justice to all interested parties that may be affected by a State’s decision in question, including the host State’s population at large”.18 Many of the substantive investment protection standards seem to have been intentionally drafted in vague terms in order to conceal differing perceptions on the value 12 The Concise Oxford Dictionary of Current English, Eighth edition, Clarendon Press, Oxford University Press, 1990, p. 420. 13 The Concise Oxford Dictionary of Current English, Eighth edition, Clarendon Press, Oxford University Press, 1990, p. 396 14 Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law, Oxford University Press, 2012, p. 123; August Reinisch and Christoph Schreuer, supra note 10, p. 276. 15 For example, Article IV.1 Spain–Mexico BIT (2006): “Cada parte contratante otorgará a las inversiones de inversores de la otra parte contratante, trato acorde con el derecho internacional consuetudinario, incluido trato justo y equitativo, así como protección y seguridad plenas”. 16 For example, Article III Norway–Lithuania BIT (1992) provides that each contracting party shall promote and encourage in its territory investments of investors of the other contracting party and accept such investments in accordance with its laws and regulations and accord them equitable and reasonable treatment and protection. 17 August Reinisch and Christoph Schreuer, supra note 10, p. 261; UNCTAD, Fair and equitable treatment - A sequel, Series on Issues in International Investment Agreements II, 2012, p. 20. 18 UNCTAD, supra note 17, p. 7. 12 of investment protection.19 Similarly, the term “fair and equitable treatment” appears as a vaguely and generally formulated standard. However, it is arguable that the FET standard has an inherent nature of vagueness and generality on purpose. It derives from the FET standard's very function, which is to address acts and occurrences that do not come under the purview of particular standards but are nevertheless considered to be at odds with the BIT's goal of protecting and promoting foreign investment.20 A considerable number of arbitral awards have gone a long way towards identifying the precise meaning of this rather vague and generally formulated standard through judicial practice. A tribunal may limit its attention to one FET standard criterion that applies to the case in order to accomplish this. A rising number of tribunals, however, have taken on the more extensive duty of presenting a list of elements that, taken together, may constitute the full scope of the FET standard.21 For the first time, the “list approach” was employed in Tecmed v. Mexico22. The Tribunal in this case held that the FET requires the host state to protect “basic expectations” that were taken into account by the foreign investor to make the investment; to act in a “consistent”, “free from ambiguity”, “totally transparent” manner so that the foreign investor may know beforehand any and all rules and regulations that will govern its investments, as well as the goals of the relevant policies and administrative practices or directives, to be able to plan its investment and comply with such regulations. Further, the FET, according to the Tribunal, requires the host state to act in a way without arbitrarily revoking any preexisting decisions or permits issued by the State that were relied upon by the investor to assume its commitments as well as to plan and launch its commercial and business 19 Roland Klager, ‘Fair and Equitable Treatment’ in International Investment Law, Cambridge University Press, 2011, p. 4. 20 Rudolf Dolzer, “Fair and Equitable Treatment: Today’s Contours”, Santa Clara Journal of International Law, 2013, Volume 12, p. 12. 21 Rudolf Dolzer, “Fair and Equitable Treatment: Today’s Contours”, Santa Clara Journal of International Law, 2013, Volume 12, p. 14. 22 Tecnicas Medioambientales Tecmed S.A. v. United Mexican States, ICSID Case No. ARB(AF)/00/2, Award, 29 May 2003, para. 154. 13 activities, and use the legal instruments that govern the actions of the investor or the investment in conformity with the function usually assigned to such instruments, and not to deprive the investor of its investment without the required compensation. It bears emphasis that the Tecmed Award has been and continues to be the award that arbitral jurisprudence cites the most, clearly having more weight than other attempts to approach the standard.23 1.1.2 Formulations and interpretation of fair and equitable treatment standard in international investment treaties It is noticeable that there has been no uniform formulation of the FET clause among investment treaties.24 In fact, the language of the FET clause differs significantly among treaties. Some treaties simply require “fair and equitable treatment” without any reference to international law or any further criteria. FET clauses of this type are referred to as unqualified, autonomous or self-standing FET standard. An example can be seen in Article 3 of Belgium - Luxembourg Economic Union-Tajikistan BIT (2009): “All investments made by investors of one Contracting Party shall enjoy a fair and equitable treatment in the territory of the other Contracting Party”. Some treaties link the FET standard to general international law. For instance, Article 3(2) of Croatia-Oman BIT (2004) provides: “Investments or returns of investors of either Contracting Party in the territory of the other Contracting Party shall be accorded fair and equitable treatment in accordance with international law and provisions of this Agreement”. Some treaties equate the FET standard to the minimum standard of treatment (“MST”) in CIL. MST is a set of CIL norms that governs the treatment of aliens.25 Accordingly, the MST asserts a level of protection for aliens, below which the treatment provided for by the host state 23 Rudolf Dolzer, “Fair and Equitable Treatment: Today’s Contours”, Santa Clara Journal of International Law, 2013, Volume 12, p. 14. 24 OECD, “Fair and Equitable Treatment Standard in International Investment Law”, OECD Working Papers on International Investment, 2004, 2004/03, p. 40. 25 UNCTAD, supra note 17, p. 44. 14